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Book part
Publication date: 2 July 2012

Ji-Hwan Lee and Seungjin Hong

Purpose – This chapter aims to identify and address methodological issues inherent in business group studies, especially within the context of South Korean chaebols, many…

Abstract

Purpose – This chapter aims to identify and address methodological issues inherent in business group studies, especially within the context of South Korean chaebols, many of which have been exalted as most remarkable cases of business groups.

Design/Methodology/Approach – After reviewing the theoretical background and the evolution of chaebols, the authors identify methodological issues focusing on the constructs of major interest to researchers, which need careful treatment for enhancing the internal and external validity of studies on business groups in general and chaebols in particular.

Findings – Any sample of business groups must be composed based on accurate definitions rather than conventional lists readily available, in accordance with the research purpose. Identifying and quantifying the strategic and structural characteristics of business groups should be accompanied by an understanding of the various types of economic organizations. The uniqueness of business groups in each country should also be considered, especially in conducting comparative analyses and generalizing research findings. Measuring performance needs more careful attention given the increasing complexity in many business groups. The embeddedness of business groups in a specific society as well as their coevolution with the institutional context urges researchers to employ more qualitative or ethnographic methods.

Originality/Value – The authors suggest alternatives through which we can cope with the methodological issues, and make suggestions for future research. As business groups continue to play a significant role in many emerging economies, continuing efforts to elaborate methods will contribute to improving the value of our scholarly work in both academic and practical dimensions.

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West Meets East: Building Theoretical Bridges
Type: Book
ISBN: 978-1-78190-028-4

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Article
Publication date: 15 February 2013

Jin‐young Jung

The purpose of this paper is to identify both the problems and their solutions in the corporate governance systems of Korean business groups (chaebols) in the wake of the

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1398

Abstract

Purpose

The purpose of this paper is to identify both the problems and their solutions in the corporate governance systems of Korean business groups (chaebols) in the wake of the Asian financial crisis.

Design/methodology/approach

This is a conceptual paper and includes suggestions for improving international governance systems.

Findings

In this paper, the author focuses on how chaebols should be restructured to improve the Korean economy. In order to figure out how they should be restructured, the author explains the positives and negatives of their current structure and how these can be modified/eliminated to make stronger corporate governance.

Originality/value

The paper provides conceptual insights into systems and laws, which can be used to improve the corporate governance of business groups.

Details

Corporate Governance: The international journal of business in society, vol. 13 no. 1
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 18 October 2011

Young‐Ryeol Park, Jeoung Yul Lee and Sunghoon Hong

The objective of this paper is to determine whether international entry‐order strategies by Korean chaebols affect the exit of their foreign subsidiaries.

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1486

Abstract

Purpose

The objective of this paper is to determine whether international entry‐order strategies by Korean chaebols affect the exit of their foreign subsidiaries.

Design/methodology/approach

The sample consists of a set of 61 parent firms and their 500 foreign subsidiaries. The sample includes 27 Korean business groups, called chaebols, and spans 51 markets, during the period from 1999 to 2004. The study employs resource‐ and knowledge‐based views, and is based on the Cox's proportional hazard model.

Findings

This study leads to two main findings: in the context of Korean business groups, latecomers in international markets have greater survival rates than pioneers do because latecomers have stronger resource commitments; and, nonetheless, if chaebol pioneers have greater competitive advantages than chaebol latecomers, the pioneers' subsidiaries have better survival rates than do those of latecomers.

Originality/value

The analysis advances order‐of‐entry research by exploring the international order‐of‐entry strategies of chaebol multinationals and their impact on international exit and the interrelationship between the order‐of‐entry and core competencies of chaebol multinationals.

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Article
Publication date: 1 March 2002

Joong‐Kwan Kim

The chaebols in Korea contained some problems. One is that they have represented a disturbing concentration of market power. There is no evidence of the big firms…

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1740

Abstract

The chaebols in Korea contained some problems. One is that they have represented a disturbing concentration of market power. There is no evidence of the big firms colluding; for the most part they compete fiercely. But, taken together, the four biggest chaebols, Hyundai, Samsung, Daewoo and LG, employ only 3 per cent of the workforce while accounting for almost a third of the total sales of all South Korean companies. These four groups alone handle nearly 60 per cent of total exports. The concentration of ownership is tighter still, the families that founded the top 30 chaebols still own perhaps 60 per cent of their combined equity. The formation of chaebol and its developing process will be reviewed and some points of their systematic problems will be summarized in this paper. Adjustment cost and equity on the reform of chaebol also will be discussed. It is natural to argue that the productive efficiency engaged in super size enterprise group should be one of the objectives which inflict large costs on the economy. It can be suggested that more reform would be efficient in choosing a new system. Professional management seems to be one of the practically efficient outcomes. As a efficient policy, it will withstand future policy challenges better than the status quo. In terms of economic efficiency and equity as well, professional management systems which clean out illegal behaviour consistently may represent an optimal mix as long as they are under the present system.

Details

International Journal of Social Economics, vol. 29 no. 3
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 13 June 2008

Du Sig Choi, Paul Michell and Dayananda Palihawadana

This paper aims to discuss the profiles of Korean chaebols involved in global electronics

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2375

Abstract

Purpose

This paper aims to discuss the profiles of Korean chaebols involved in global electronics

Design/methodology/approach

The research was conducted among 132 of their Korean suppliers, with linked in‐depth interviews with chaebol managers. From an initial set of literature‐based variables, factor analysis is used to generate six chaebol characteristics, which are then correlated with four chaebol‐supplier relationship outcomes.

Findings

“Decision making” and “social exchange”, in particular, are found to correlate positively with all four chaebol‐supplier relationship outcome measures, relationship satisfaction, performance, cooperation and conflict resolution. “Partnership” is associated positively with three of these outcomes, and “strategy‐longevity” with relationship satisfaction. The chaebols' “structure‐control” and “leadership” are not found to be predictors of successful relationship outcomes as measured in this study. A combination of higher quality, lower cost products with linkages to a foundation of decision making, social exchange, partnership and strategy‐longevity appears to be a potent mix for global players.

Originality/value

The paper provides the underpinnings of the marketing strategy and component strategy profiles of a number of major Korean multinationals in the belief that they would inform western relationship marketing strategies.

Details

Journal of Business & Industrial Marketing, vol. 23 no. 5
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 11 May 2012

Seung‐Rok Park and Ky‐hyang Yuhn

The purpose of this paper is to investigate how Korean conglomerates (chaebol) have rapidly ascended to international prominence. The success of Korean chaebol firms seems…

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2467

Abstract

Purpose

The purpose of this paper is to investigate how Korean conglomerates (chaebol) have rapidly ascended to international prominence. The success of Korean chaebol firms seems to be associated with internal market transactions. Just as Japanese keiretsu firms succeeded by utilizing a bank‐centred financing system, Korean chaebol firms devised an internal financing system such as payment guarantees and collateral provisions in a restrictive regulatory environment.

Design/methodology/approach

This study examines the effects of such internal market transactions on the technical efficiency of chaebol firms using a stochastic frontier function for a panel data set of 1,675 firms from 1992 to 1998.

Findings

The study has found that chaebol firms have achieved a net gain in technical efficiency by utilizing internal market transactions as a way of mitigating liquidity constraints. Thus, the chaebol's role as an internal capital provider has given Korean conglomerates a competitive advantage in product pricing and capital financing, which is the main source of the success of Korean chaebol firms.

Originality/value

What is new in the paper is that the positive effects of the Korean chaebol on the Korean economy have outweighed the negative effects of the chaebol. The paper has provided empirical evidence that the chaebol played a major role in transforming the Korean economy from an agricultural economy to an IT‐led economy. The main value of the paper may be found in its attempt to analyze the technical efficiency of Korean large business groups using a stochastic frontier production approach. The paper will appeal to readers who are interested in the driving forces of rapid economic growth in a developing economy.

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Article
Publication date: 1 October 2002

Keun Lee

Places Korean chaebols (i.e. family‐owned conglomerates) in the context of organizational theory, characterizes them as leveraged controlling minority structure firms and…

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1218

Abstract

Places Korean chaebols (i.e. family‐owned conglomerates) in the context of organizational theory, characterizes them as leveraged controlling minority structure firms and discusses the behavioural consequences of this. Examines their long term performance in terms of diversification/changinb business environment, aggressive investment drive and the effects of management by one man. Considers the necessary conditions for efficient corporate governance and relates them to various Korean reforms, e.g. to protect minority shareholders. Summarizes the findings of the study and briefly considers their implications.

Details

Managerial Finance, vol. 28 no. 10
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 26 March 2010

Chad Albrecht, Chad Turnbull, Yingying Zhang and Christopher J. Skousen

In recent years, many of South Korea's most prominent organizations have been involved in large‐scale frauds. These frauds have had a devastating impact on South Korean…

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3310

Abstract

Purpose

In recent years, many of South Korea's most prominent organizations have been involved in large‐scale frauds. These frauds have had a devastating impact on South Korean society and resulted in unnecessary suffering and high levels of unemployment for the middle class. With the aim of understanding the causes of these scandals, this paper takes an in‐depth look at the chaebol organization.

Design/methodology/approach

The paper takes a conceptual approach by first examining chaebols in greater detail. The paper then examines classical fraud theory, including the fraud triangle. The paper then examines chaebol organizations through the lens of the fraud triangle. By doing so, it is possible to understand why chaebols, in particular, are susceptible to fraud and corruption.

Findings

The paper provides evidence to suggest that chaebol organizations have inherent fraud risks. In order to minimize these fraud risks, chaebol organizations must address these issues.

Originality/value

This paper fulfills an important area of research by providing basic information about the relationship between chaebol organizations and fraud.

Details

Management Research Review, vol. 33 no. 3
Type: Research Article
ISSN: 2040-8269

Keywords

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Article
Publication date: 7 September 2021

Wenwen Jiang and Hwa-Sung Kim

The authors show that there is a negative relationship between economic policy uncertainty (EPU) and firm overinvestment using Korean data from 2007 to 2016. Since Jensen…

Abstract

The authors show that there is a negative relationship between economic policy uncertainty (EPU) and firm overinvestment using Korean data from 2007 to 2016. Since Jensen (1986) shows that a firm's free cash flow is an important factor of overinvestment, the authors examine how free cash flow influences the sensitivity of overinvestment to EPU. The authors find that a high level of free cash flow attenuates the negative effect of EPU on overinvestment. The authors find that there is no significant difference in the effect of EPU on overinvestment between Chaebol (Korean family-run conglomerates) and non-Chaebol firms, which is consistent with the literature that the features of Chaebol are weakening.

Details

Journal of Derivatives and Quantitative Studies: 선물연구, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1229-988X

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Article
Publication date: 18 July 2019

Soojeen Sarah Jang, Hyesoo Ko, Yanghon Chung and Chungwon Woo

This paper aims to explore the effect of social ties on the relationship between corporate social responsibility (CSR) and firm performance in Korea.

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1212

Abstract

Purpose

This paper aims to explore the effect of social ties on the relationship between corporate social responsibility (CSR) and firm performance in Korea.

Design/methodology/approach

Social ties were measured from firm disclosures of 318 Korean firms from 2012 to 2015. Propensity score matching and regression analysis were used to investigate the moderating effects of social ties on the relationship between CSR and firm performance.

Findings

The result shows that social ties have more negative moderating effects on the relationship between CSR and firm performance in Chaebol firms than in non-Chaebol firms.

Practical implications

Firms need to enhance the monitoring of social ties within board members to assure the proper oversight of CSR.

Originality/value

This paper contributes to the CSR literature by providing empirical evidence of the negative aspects of social ties on the relationship between CSR and firm performance in Korea.

Details

Corporate Governance: The International Journal of Business in Society, vol. 19 no. 6
Type: Research Article
ISSN: 1472-0701

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